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Buy REITs. Way easier. Already levered. Liquid. Risk mitigated. Managed. Any RE sector from SFR to office to healthcare to prison to debt.
I’ve owned my home for over 15 years and have 70% equity I don’t intend to sell it because my elderly parents are living in the home and I don’t want them to have to be uncomfortable. I will sell once they aren’t there any more but hopefully that won’t be for a long time. Meanwhile, I bounce around from corporate housing to hotels but would like something more stable. My home is on the West Coast and my projects are mostly Midwest/East Coast so is like something Midwest for practical reasons. But I’m not sure if it’s feasible and if I’m being realistic. I don’t know what to look for in terms of red flags for future financial stability
REITs pay some of the highest dividends because they are required to payout 90% of earnings to the shareholders.
That being said, dividends are only a portion of earnings. And how the management of any business allocates the company’s earnings is at their discretion.
But, you can compare putting $100k down on a single property, and raising debt, and self managing, or outsourcing the management, to putting the same $100k into a reit or collection of REITs. Your $100k would be a small fraction of the total equity, which is levered by a large portion of debt, and spread over hundreds or thousands of properties or mortgages.
All the underlying fundamentals remain the same.
@K1 what REITs are you in?
Not recommending any of the following in particular... only a few ideas if you don’t like the easiest way of buying something like Vanguard’s REIT ETF (VNQ and VNQI).
You could also do private real estate funds (e.g., Blackstone’s BREIT), crowdfunding (Fundrise, RealtyShares, Rich Uncles), or single family or multi-family residential (Roofstock, Memphis Invest, Norada).
Is there a San Francisco Bay area centered REIT. The other REITs do not yield as much.
Aren't the returns in REIT low to mid single digits?